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Promissory Estoppel Explained

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Promissory Estoppel Explained

We take a look at the recent case of Moore v Moore to illustrate the High Court of England & Wales’ application of the long-standing principle of Promissory Estoppel - that fairness should be maintained where possible…

The case

Roger Moore ran his family’s 650-acre Manor Farm in Stapleford, with the assistance of his son, Stephen Moore. Stephen worked on the farm, for minimal pay, since childhood, but in 1998, he became a salaried partner, and in 2003 his father, Roger, made him a full equity partner.

Sadly, in 2008, Roger Moore began to show signs of early onset Alzheimer’s disease, which forced him to take a less dominant role in running the family business. As Roger’s mental decline continued, the relationship between father and son deteriorated as arguments began.

In 2012, Roger decided to make a new Will, which disinherited Stephen. Although Roger has not yet passed away, the Will was cited as evidence in this case, to illustrate Roger’s change of mind in respect of Stephen’s right to the farm.

Furthermore, Stephen claimed that his father had been influenced by his wife, Pamela, when making the Will. She wasn’t on good terms with Stephen, and wanted her daughter to inherit a share of the business. Another point Stephen contended was that his father has explicitly promised the farm to him, creating an expectation on Stephen’s part that he would inherit the same.

The principle of Promissory Estoppel

Essentially, Promissory estoppel is an equitable doctrine, which is based on fairness. In some instances, it can stop a person going back on a promise, which is not supported by consideration.

There are three main requirements which need to be satisfied:

  1. A pre-existing legal relationship between the parties (A) and (B);
  2. A clear and unambiguous promise or representation that one party to that contract (B) will not insist on their strict legal rights against the other (A). This may be expressed or implied, but it is key that (B) intended for the promise or representation to affect the legal relationship between the parties; and
  3. (A) has changed their position in reliance on that promise or representation, so that it would be unfair for B to go back on the promise.

The outcome

Essentially, the High Court found that the criteria set out above was fulfilled, as there was clearly a contractual relationship between Stephen and Roger. Stephen persuaded the Court that Roger made a promise that he would inherit the farm from his father in its entirety, and had acted in a manor reliant on that promise by working and contributing to the family business for the whole of his working life.

Monty J in his judgment stated: “It seems to me that everything points to an over-arching plan under which Stephen would inherit the whole farm and business in due course and that Stephen was told this was the case. The fact is that promises were made, and in reliance on them, [Stephen] devoted his entire working life to the farm and the business.”

As a result, Stephen was awarded sole ownership of the farming business as the Court was satisfied that the requirements for his equitable estoppel claim to Roger’s share of the farm, as well as all associated cash, were met. Monty J dissolved the farming partnership between the father and son, due to the fact that Roger was suffering from dementia. However, the court also ordered that Roger and Pamela Moore continue to reside in the farmhouse at Stephen’s expense, received an income of £200 per week from the business for as long as they need it, and for Stephen to pay all reasonable health and care costs for them from the partnership funds.

This particular case must have been quite an emotional journey for all parties. Here at Franklins we work to support our clients during these kinds of matters that can be incredibly tricky to navigate. Please feel free to contact myself or one of our Private Client team should you find yourself in an equally complicated situation with a family member. You can reach me by email, or call 01908 660 966.

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